ACA-11

Whether unilateral appointment of the arbitrator by a party is illegal and void  | What would be the consequence of an arbitral award passed by arbitrator appointed unilaterally by a party – Dinesh Chandra Vs. Eadred Finance Pvt. Ltd. and 3 Ors. – Allahabad High Court

In this case, agreement contains that sole arbitrator shall be appointed by the lender and the same was appointed by one party and passed award.

Hon’ble Allahabad High Court held that once the provisions of Section 12(5) have been interpreted by Hon’ble Supreme Court having application to clause in agreement providing for unilateral appointment of arbitrators, unless in those circumstances, after the dispute has arisen, a written consent is given by the other party, arbitrator appointed would be ineligible.

The Hon’ble Court also held that the award which has been passed by a de jure ineligible arbitrator suffers from patent illegality and cannot be sustained.

Whether unilateral appointment of the arbitrator by a party is illegal and void  | What would be the consequence of an arbitral award passed by arbitrator appointed unilaterally by a party – Dinesh Chandra Vs. Eadred Finance Pvt. Ltd. and 3 Ors. – Allahabad High Court Read Post »

Whether an Arbitral Tribunal can add/ join or delete parties to arbitration proceeding or the jurisdiction to do so vests only with the referral Court? – Indraprastha Power Generation Company Ltd. Vs. Hero Solar Energy Pvt. Ltd. – Delhi High Court

Hon’ble Delhi High Court held that the Section 11 Court should leave, to the Arbitral Tribunal, the decision as to whether a non-signatory to the arbitration agreement should be bound by it. The corollary would obviously be that if the Arbitral Tribunal were to find that a non-signatory is bound by arbitration agreement, it would necessarily have to include such non-signatory in the arbitration proceedings. Following Cox and Kings-II, therefore, it may be possible to argue that an Arbitral Tribunal does possess the jurisdiction to implead non- signatories who may be bound by the outcome of the arbitral proceedings.

However, a party cannot be impleaded merely to support the stand taken by the litigant before the Arbitral Tribunal. It is always open to a party before the Arbitral Tribunal to lead the evidence of a non-signatory, if it so desires to support its stand. The non-signatory does not have to be made a party in the arbitral proceedings merely for that purpose.

Whether an Arbitral Tribunal can add/ join or delete parties to arbitration proceeding or the jurisdiction to do so vests only with the referral Court? – Indraprastha Power Generation Company Ltd. Vs. Hero Solar Energy Pvt. Ltd. – Delhi High Court Read Post »

Whether a Third Party claiming through an original signatory to an arbitration agreement can also come within the purview of “party” within the contemplation of the Arbitration and Conciliation Act, 1996 – Basant Kumar Khemka and Anr. Vs. City Shoppe Estates Ltd. – Calcutta High Court

Hon’ble Calcutta High Court held that:

(i) Even if a non-party to the agreement who claims under or through the original signatories makes such a prayer, the court shall refer the matter to arbitration.
(ii) The Section 11 does not specifically use such an expansive expression to hedge the term ‘party’. However, by similar logic as incorporated in Section 8, if at the behest of a third party to the agreement claiming through a signatory to the arbitration agreement can have the matter referred by a judicial forum to an arbitrator, there cannot be any reason why the same party cannot file an application under Section 11 seeking appointment of an arbitrator.
(iii) The dispute is prima facie arbitrable and that the dispute raised by the petitioners comes within the ambit of the arbitration clause in the agreement dated May 2, 1995.

Whether a Third Party claiming through an original signatory to an arbitration agreement can also come within the purview of “party” within the contemplation of the Arbitration and Conciliation Act, 1996 – Basant Kumar Khemka and Anr. Vs. City Shoppe Estates Ltd. – Calcutta High Court Read Post »

If an Arbitral Tribunal constituted by the High Court under Section 11(6), an application under Section 29A(4) of the Arbitration Act would lie to the High Court and if an Arbitral Tribunal constituted as per Section 11(2), the application under Section 29A(4) would lie to the principal Civil Court of original jurisdiction in a district and includes the High Court in exercise of its ordinary original jurisdiction – Sheela Chowgule Vs. Vijay V. Chowgule and Ors. – Bombay High Court

The Larger Bench of Hon’ble Bombay High Court held that the term “Court” for the purpose of Section 29A(4) would be the “Court” which appointed the Arbitrator(s) under Section 11(6) of the Arbitration Act i.e. the High Court in the present case and therefore, answer the reference thus :

(i) In the event an Arbitral Tribunal constituted by the High Court under Section 11(6) fails to complete the proceedings within the stipulated period/extended period, then an application under Section 29A(4) would lie to the High Court in case of a domestic arbitration.

(ii) In answer to the second question, we opine that in the event an Arbitral Tribunal consisting of three Arbitrators is constituted as per Section 11(2) i.e. with agreement and consent of the parties, fails to complete the proceedings within the stipulated period/extended period, the application under Section 29A(4) would lie to the principal Civil Court of original jurisdiction in a district and includes the High Court in exercise of its ordinary original jurisdiction.

If an Arbitral Tribunal constituted by the High Court under Section 11(6), an application under Section 29A(4) of the Arbitration Act would lie to the High Court and if an Arbitral Tribunal constituted as per Section 11(2), the application under Section 29A(4) would lie to the principal Civil Court of original jurisdiction in a district and includes the High Court in exercise of its ordinary original jurisdiction – Sheela Chowgule Vs. Vijay V. Chowgule and Ors. – Bombay High Court Read Post »

Existence of an arbitration agreement in case of transaction between Buyer and Seller through Intermediary Online Platform – Pacific Foods Vs. Krest Enterprises – Delhi High Court

Hon’ble Delhi High Court held that while the question of the existence of an arbitration agreement requires the prima facie satisfaction of the Court, the final adjudication of this question is best left to the arbitral tribunal. The terms and conditions filed by the respondents, appear to be the terms and conditions which applied to the relationship between the Red Basil platform and its subscribers. Terms and conditions make it clear that the transaction is between the buyer and the seller, for which Red Basil is merely acting as the intermediary. Therefore, there prima facie exists an arbitration agreement, to which both parties have assented by exchange of electronic communications, and that the arbitration clause has been invoked in accordance with law.

Existence of an arbitration agreement in case of transaction between Buyer and Seller through Intermediary Online Platform – Pacific Foods Vs. Krest Enterprises – Delhi High Court Read Post »

Can a third-party non-signatory to an arbitration agreement be included in the arbitral proceedings? – RBCL Piletech Infra Vs. Bholasingh Jaiprakash Construction Ltd. (BJCL) and Ors. – Delhi High Court

Hon’ble Delhi High Court held that one of the common circumstances in which a non-signatory can be included in an arbitral proceeding is where the said non-signatory and one of the signatories to the arbitration agreement are part of one “group of companies” – often known as the “Group of Companies” doctrine. It is not, however, where the non-signatory is part of the same group of companies to which the signatory belongs, that alone the non signatory can be co-opted in the arbitral proceedings. One of the circumstances which would justify the inclusion of a non-signatory to an arbitration agreement in arbitral proceedings is a contractual relationship which makes a non-signatory also responsible to one extent or the other to the obligations towards the claimants.

Can a third-party non-signatory to an arbitration agreement be included in the arbitral proceedings? – RBCL Piletech Infra Vs. Bholasingh Jaiprakash Construction Ltd. (BJCL) and Ors. – Delhi High Court Read Post »

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